Oil prices rose above $ 52 a barrel yesterday as fears about inadequate refining capacity and strong demand later in the year countered the effect of ample supplies for now. US light crude traded up 23 cents to $ 52.26 a barrel, extending a gain of $ 1.07 in New York on Monday.

Brent crude oil in London gained 27 cents to $ 51.56. ?Seasonally firm demand, especially from the US, is expected in the fourth quarter in winter. Demand levels are expected to grow and the question remains whether the high OPEC output can meet the increase?, said Tony Nunan of Mitsubishi Corp in Tokyo.

?It?s still about the third and fourth quarter. It?s still about product refining capacity?, said Deborah White, senior economist of SG Commodities in Paris. ?What good does it do to have the oil, when you don?t have the refining capacity?? US crude prices are around $ 6 below last month?s record high of $58.28, even though OPEC producers have raised output to a 25-year high.

OPEC President Sheikh Ahmad al-Fahd al-Sabah said on Tuesday the 11 members of the Organization of the Petroleum Exporting Countries, including Iraq which does not have a formal production quota, will produce 30.3 million barrels per day this month, a rise of 600,000 bpd from April. He also said they would produce at the same level in June.?I think that based on the market and the market needs we need to continue with 30.3 million until the third quarter because the prices have started to stabilize?, he told Reuters.

OPEC has been seeking to boost stocks to prevent a supply crunch during the peak demand northern hemisphere winter in the fourth quarter and US inventories have swelled to the highest level for nearly six years. A Reuters survey of analysts found that when the US Energy Information Administration releases its next set of stocks data on Wednesday, it is expected to show crude inventories have risen by a further 1.8 million barrels in the week ended May 6, after hitting 327 million barrels the week before.

The build would be the 12th in 13 weeks, but even a prolonged period of inventory increase might not be enough.Qatar Energy Minister Abdullah al-Attiyah said on Monday the global oil market was amply supplied for now, but he was concerned about supplies in the fourth quarter. ?For sure, we are concerned about the fourth quarter?, he said.